Fuel prices are already high enough, and a substantial rise at the pump loomed from 2027. However, there now appears to be good news for motorists: leaked Budget Day documents indicate that the cabinet intends to phase out the discount on petrol and diesel excise duty less rapidly. This could potentially prevent a sudden price increase. For motorists, this means some financial breathing room for the time being, while the government is reportedly missing out on around 750 million euros in revenue.
Temporary fuel discount lasts longer and longer
The discussion regarding petrol and diesel excise duty has by now become almost an annual tradition. The original reduction was intended as a temporary measure during the energy crisis, but the discount has now been extended for several years.
Excise duty reduction began in 2022
In April 2022, the Cabinet lowered the excise duty on petrol, diesel, and LPG due to exceptionally high energy prices. From July 2023, part of that reduction was reversed, but the remaining discount remained in place. Subsequently, the excise duty rates were not fully indexed on several occasions. For 2026, it was decided once again to maintain the lower rates. In 2026, based on current rates, the excise duty rate will amount to approximately 84,5 cents per liter for petrol and 55,2 cents for diesel. Due to the absence of earlier indexations, the tax burden is lower than originally anticipated.
What would happen in 2027?
The original plan was for the temporary excise duty reduction to expire on January 1, 2027. This would cause rates to return to normal levels. For motorists, this could mean a significant increase in fuel costs. The original reduction is not the only factor at play here. Previous indexations have also been postponed in recent years.
Possible increase per liter
The government previously calculated that reversing the discount and retroactively processing deferred indexations could together lead to an increase of approximately 26 cents per liter including VAT for petrol and 17 cents for diesel compared to the reduced rate. For example, someone filling up with 50 liters of petrol would potentially end up paying well over €13 extra per full tank.
For motorists who drive many kilometers, this can add up significantly on an annual basis. A good trip log provides insight into the number of kilometers driven and can help to better map the consequences of rising fuel costs.
Cabinet seems to be postponing phase-out again
The leaked Budget Day documents indicate that the cabinet intends to spread out the phasing out of the discount again. This prevents the excise duty on petrol and diesel from rising sharply all at once on January 1, 2027. According to the leaked documents, the measure will cost the Treasury approximately 750 million euros.
Good news for motorists
For motorists, the postponement is positive news for the time being. Those who depend on a petrol or diesel car will likely not immediately face the full increase previously projected for 2027. People who drive high mileage, such as business drivers and those with long commutes, can particularly benefit from this.
What does this mean for your fuel costs?
How much you ultimately notice of the petrol and diesel excise duty depends mainly on how many kilometers you drive and how much your car consumes.
Track your mileage and consumption
With automatic trip logging, you gain insight into your business and private trips. Combined with your car's fuel consumption, this allows you to better calculate how much you actually spend on fuel. This becomes even more relevant should the government further increase fuel excise duties in the future.
The fuel bill remains uncertain.
Although the news regarding petrol and diesel excise duty sounds positive for the time being, this does not mean that fuel will remain cheap. After all, the final price at the pump is determined not only by the excise duty, but also by the oil price, refining costs, VAT, and developments on the international energy market.
